After a government-owned regional ferry service is transferred to a private company, the operator's costs fall. No competing operator enters the route and passenger fares increase. Which conclusion is most accurate?
Improved efficiency can occur even where limited competition is associated with higher fares.
The policy is deregulation because the ferry operator is now privately owned.
The higher fares show that the transfer produced no improvement in efficiency.
The lower costs make the increase in passenger fares irrelevant when judging the policy.
121 exam-style questions on OCR GCSE Economics 3.7 Supply side policies, covering 3.7.1 What are supply side policies and 3.7.2 Costs and benefits of supply side policies. Each one has a worked solution and a mark scheme showing where the marks go.